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Forgeries and the Art Market

Kyle Mohagen
Economics 411
Professor Warning

Table of Contents
1.0 Introductionp. 3
1.1 Background.p. 5
1.2 Forgeries..p. 8
2.0 The Art Market..p. 10
2.1 Uncertainty.p.13
2.2 Transaction Costs..p.14
2.3 Benefits of Forgeries..p. 16
3.0 Individual Choices..p.18
4.0 Conclusion..p. 20

1.0 Introduction
The art world is a chaotic arena filled with an eclectic group of individuals all
acting in the interest of their specific area. Among these individuals are the artists, who
create and sell art, the historians, who value the art for its technical, aesthetic, and
historical achievement, the collectors, who generally purchase art for its aesthetic
pleasure along with the incentive that it has a certain degree of value, the dealers, who see
art in terms of the market and the ability it has to turn a profit, and the investors, those
who believe in the ability of art to appreciate and provide a monetary return. Each of
these individuals plays an important role in the functionality of the art market. Problems
arise however when greed overcomes appreciation and the introduction of forgeries
In May of 2000, the same painting was set to be auctioned at the two most well
known auction houses in the world, Christies and Sothebys. One might ask how the
same painting can be in two auction houses at once. Well, the answer to that question is
that one of the two is a forgery. It just so happens that a small New York gallery owner
was into the forgery business and one of the works he sold to a collector under the guise

of authenticity was being auctioned at the same time he decided to put the original up for
auction. The way this scam worked was that the gallery owner bought a number of lesser
known works by famous artists, had high quality forgers copy the paintings, make the
frame and canvas look decades old, and then forge a certificate of authenticity. These
copies where then sold to collectors oversees, primarily in Japan and Taiwan. Apparently
this had been working for the past fifteen years when purely by coincidence the two
works were set for auction at the same time. The gallery owner agreed to pay $12.5
million to the collectors that bought the fakes, hand over eleven works from his collection
that were proven to be legitimate, and now faces up to five years in prison. (Preston
2004) This leads to the question is it worth it for members of the art world to deal in
forgeries or would they be better off trying to rid the market of these forgeries?
To answer this question one must approach it from a couple of different angles.
There is the originator of the forgery, the original buyer of the forgery, then all those
afterwards who come into contact due to the high rate of turnover in the market. It would
seem that the original buyer of the forgery would not stand to lose anything if it was
discovered whereas the originator of the forgery would stand to lose a substantial amount,
as was seen in the above example. The buyer is fully compensated for the loss in value
and the originator faces severe penalties including prison time. Another interesting
player to look at would be the one who had possession of the work when it was
determined to be a forgery. This individual could end up incurring the entire cost of the
work if the originator was too far removed to be found. In the end someone will have to
suffer the consequences of a forged work being dealt as something authentic.

Based on the idea that aesthetic value is the primary source of gain in the
purchase of a work of art this paper will determine what effects forgeries have on the
market through a careful analysis of the structure of the market as well as the role of each
individual. Art as investment is a different issue in which forgeries would have a
severely different impact and will not be discussed in this paper. Issues of transaction
costs and uncertainty in regard to forgeries and the art market will aid in the discussion as
we explore the impacts of forgeries. After viewing the issue from all sides a true idea of
the consequences of forgeries will be determined. This determination will be based on
information regarding the functionality of the market under the assumption that art is
being bought and sold for aesthetic gain.
1.1 Background
Art and economics are two fields that create an intriguing course of study. When
combined they create an area in which fundamental ideas of economics are explored in an
aesthetically cultural way. Economics has a large influence on the art world and the
impact of this relationship on society will demonstrate how important these two different
fields are. An area in which the mixture of art and economics is clearly seen is in the art
market. The fine arts sector of the art market is of particular interest because it deals with
a physical good that is heavily dependent on the tastes and preferences of individuals.
Fine arts are defined as paintings, sculpture, etchings along with all other works that can
be displayed in museums or galleries. (Heilbrun and Gray 2001) Institutions involved in
the fine arts market include museums, galleries, and dealers. The introduction of a
forgery into this market has the potential to heavily impact the key players and alter the
equilibrium of the market. Forgeries alter the dynamic of the market because they bring

imperfect information, new uncertainty, and transaction costs. Through the presence of
forgeries buyers have less of an idea as to whether they are buying an original work.
There is an insufficient amount of information about numerous paintings to tell for sure
whether they belong to the hand of a master or are a cheap fake. This leads to a degree of
uncertainty where historians will debate about whether a painting is actually what it is
claimed to be. The buyer is then left in a state of uncertainty where he can buy the work
in hopes that it is proven to actually be what it is claimed to be or he can forego purchase
based on the fact that it might not be a genuine work. Transactions costs arise in efforts
to discover if a work is authenticated correctly as well as in obtaining information and in
purchasing the work itself. These costs are generally high and can be a persuasive factor
when faced with the question of authentication. With the addition of forgeries in the
market dealers and galleries find themselves more at risk to associate with works of art.
If a dealer or gallery supports a painting that turns out to be a forgery their reputation
takes a grave blow and they lose any money they put into the painting. (Wilson Quarterly
2000) This in turn weighs heavily on the minds of all art buyers and sellers and has a
profound impact on the market.
Even the suspicion of a forgery has the ability to bring about a number of adverse
effects that alter the dynamic of the market. (Cebik 1989) If a well known dealer or
connoisseur has even a slight suspicion that a work may be a forgery, that suspicion leads
others to suspect it as well and the work will end up not selling. This causes a decrease in
the ability to sell art due to the heightened transaction costs associated with
authenticating a work of art. Not only is there transaction costs associated with
authenticating works, but also uncertainty. Uncertainty is present because if the work

turns out to be a fake it would not have the same value, thus one would lose the cost of
authentication as well as the loss of value associated with the work. Also many works
cannot be agreed upon as to whether they are forgeries or not. Some connoisseurs,
dealers, or collectors will firmly hold that a work is genuine while others may believe it is
a fake. For instance in 1997 there was a debate in New York as to the authenticity of a
work called Madonna del Divino Amore. The owner of this work held firm that it was
a genuine Raphael while many other art historians were certain it was a fake. This case is
still up in the air as a consensus has yet to be reached. (Athineos 1997) In this manner it
is difficult for some works to be authenticated which leaves the work in limbo as a
heavily risky venture.
Through an extensive look at the art market one will be able to identify how the
influx of forgeries will affect it and what the response of dealers, collectors, historians,
and artists will be. Forgeries add an extra level of uncertainty to a market that already
contains imperfect information and transaction costs. With this addition the reaction of
dealers will have the most profound impact on the market as a whole. Artists will
continue to create art and collectors will continue to collect (especially for aesthetic
reasons) but dealers face heavy conflict when faced with a forgery. The problem is
determining what the best course of action is, that should be taken. Should dealers incur
the extra transaction costs to make sure they are dealing in genuine works or should they
surpass that cost and hope that if they deal a fake it will not be found out until after they
have sold it? If a guy gets duped and discovers he bought a fake, hell dump it back into
the marketplace rather than report it to the police. No one wants to lose money. Thats
why these dogs keep circulating. (Athineos 1997) Dealers are less eager to look

closely at questionable works from which they stand to profit handsomely. (Wilson
Quarterly 2000) Under the assumption that art is dealt for reasons based in aesthetic
value it will become clear that it is in best interest of all parties involved to forgo the
costs of authentication and allow forgeries free range in the market.
Looking at a forgery from a non art aficionado perspective it is simply a perfect or
near perfect copy of an original. This raises the question of, if art is purchased for a
degree of aesthetic value what kind of aesthetic difference is there between an original
and a forgery? Obviously at the time of purchase there is no difference if the buyer
believes the work to be authentic. It is this idea that allows the assertion to be made that,
forgeries overall do not negatively impact the market, therefore leading to the idea that
the cost of authentication is not worth the additional information of knowing whether or
not a work is legitimate.
1.2 Forgeries
A forgery is normally defined as a work of art presented to a buyer or audience
with the intention to deceive. (Dutton 1993) With this interpretation it can be said that
works dating back to the renaissance that could have been painted by the workshop of a
master painter that are then passed off as the work of the master are not going to be
considered forgeries. These types of works are very difficult to differentiate and often
can be debated for years by distinguished art historians and connoisseurs. What works
are considered forgeries? In this paper forgeries will be all works that have been created
in a modern period in which the sole purpose is to sell the work as something that it is
not. Any work painted by someone in the style of a famous artist that is then attempted to

be sold as the work of that artist as well as a straight duplication of a work that is trying
to be sold as the original are the primary forms of forgery that will be discussed.
There are a number of ways in which forgers operate to try and create the proper
look and feel of the artist they are attempting to mimic. The most skilled and highest
paid forgers are those that understand the intricacies of creating a phony work. They
must take into consideration the time period in which the original artist was working in
respect to the materials that were present as well as the social atmosphere of the era. Due
to the necessity of exactness many of the great forgers have been known to create their
own brushes and paints utilizing the same methods as the artist they are attempting to
render. (Dutton 1993) Once a forger has gotten a number of works into the market place
he tends to dictate the style of the original artist. Meaning with every work he does he
will include a little more of his own personal style and eventually the stylistic
characteristics that come to define a specific artist are in actuality characteristics of the
forger. (Dutton 1993) Forgers with this type of ability can throw the market in a spin
because works that have been agreed upon as those done by a master painter turn out to
be fakes.
With this level of intricacy involved in the process of forgery the fakes end up
being just as original as the original works. For a majority of people in the world and a
number of art historians if you were to present them with a forgery of this style they
would appreciate it as if it were an authentic original. Again, the question is raised is it a
bad thing for forgeries to be present in the market? From every standpoint there is no
aesthetic value that gets depreciated until the forgeries are discovered. Therefore if
forgeries are just left alone there will be no cost to discover them and no value will be

lost. It could be stated that with an insurgence of forgeries in the market the price of all
art will decrease due to the increase in works being sold. This would not necessarily be
the case in the art market due to the fact that the market is highly based on individuals
and their tastes and preferences. One individual may still be willing to pay a higher price
simply because that individual will gain more utility through owning the work than
someone else. As an aesthetic viewer of art a perfect replica painted by the hand of a
person holds the same amount of meaning as an original painting painted by the master.
There is no visible difference and if two people hold the same painting they will each get
utility from thinking it is the original, as long as they never meet or have their work tested
they will never lose that utility. In this sense forgeries add to the utility of individuals in
the art market.
2.0 The Art Market
Art is a good, and as a good it is bought and sold within a market. This market is
similar to most markets for goods in that buyers and sellers are joined together to engage
in a mutually beneficial exchange. Buyers and sellers can be any one of the key players
that were mentioned in the introduction, as each of them generally has a role in both
positions. As with other markets there are several contributing factors to how and why
works get bought and sold at various price levels. One of the primary factors in pricing a
work of art is the tastes and preferences of the buyer. This is an area where the market
differs a little from most competitive markets because it relies on the demand of single
individuals. Buyers maintain a substantial amount of power due to the fact that in certain
cases there may be very few or even only one potential buyer for a given work. (Frey
2000) In this case the seller has to deal directly with the buyer at hand or face not selling

the work. Here an informed buyer has the advantage and can purchase the work at a level
he chooses instead of relying on the price set by the seller. On the other side an
uninformed buyer can easily be swayed into paying more than they needed to simply due
to their lack of information. It is likely that the determined price for a work of art only
represents a very small portion of the population and the majority would never accept
such a price. (Frey 2000) In this way the market functions differently than most based on
supply and demand. Here a single consumer could potentially make an artists career.
Collectors can be easily swayed by purchases made by others and one key sale can lead
to more sales in the future. This is the way things work in art, certain people are willing
to spend a certain amount simply because they get that level of utility from the work of
Tastes and preferences weigh heavily on the determination of price. This is due to
the fact that aesthetic value is equal to the economic value of a work of art. (Grampp
1989) Art gets sold primarily for aesthetic reasons, no matter what your interest in
purchasing art is there will always be a degree of aesthetic pleasure associated with the
painting. This is why aesthetic value can be given as equal to economic value. Without
the presence of aesthetics there would be no sale and thus no market, so originally
aesthetics set the price of a work which in turn created an economic value. As more
people enter into the market there will be a wider array of tastes and preferences and
therefore more works will be bought and sold. In this sense economic values will
increase as more people are able and willing to purchase works of art. Based on this idea
the addition of forgeries in the market allow for more people to purchase works thus
increasing the size of the market.


Other factors that make up the market are that of uncertainty and transaction
costs. These two ideas are related in that uncertainty often creates transaction costs.
Uncertainty in the art market takes the form of imperfect information. The seller will
generally have a certain degree of information unavailable to the buyer creating a level of
uncertainty for that buyer. Not only through imperfect information in the market can
uncertainty be created but through historically imperfect information. Often a work will
be determined to be painted by some famous painter only to have new information
discovered that proves the artist of that work was really someone different. In this case
buyers have bought a work under the impression it was one thing only to find out later it
is really something else. This scenario has lead to a decrease in monetary value of the
work, but under the assumption that art is being bought for aesthetic reasons the
monetary decrease will not have a severe impact on the utility received. Also being that
if a work is reattributed to a lesser known artist thus decreasing monetary value heavy
pressure is put on historians, critics, and museums to not reattribute. (Barrett 1996) Also
there are instances where museums have rejected reattribution to maintain the original
value of their works. (Barrett 1996) These are all inherent uncertainties that will be ever
present in the market due to the limitations of art history.
Regulations have been put forth on artists that require them to place a price tag on
any work they are trying to sell in a gallery or through a dealer. This does not mean that
they must sell at those prices, instead it gives a limit to the amount they can charge
(auctions are different). Regulations such as this are put in place to protect buyers from a
situation of asymmetric information. Potentially the seller will have information
unknown to the buyer and could therefore overprice their work to take advantage of that


information. By forcing artists to label their works it takes away some of the advantage
of that asymmetric information. (Grampp 1989)
Transaction costs exist primarily in the discovery of information about a work.
There are heavy costs associated with obtaining information about an artist or a particular
work that is up for sale. The dealer in this situation will try and only give out enough
information to persuade the buyer to purchase the work. So, finding more information is
a challenge that costs time and money. Also when there is a question of authenticity a
huge cost arises in the process of authentication. This process requires expert art
historians as well as scientific methods that are very costly. Using this market structure
as a framework for determining the effects of forgeries it is more beneficial and less
costly to allow the presence of forgeries.
2.1 Uncertainty
Attribution in art is an important aspect of the market that allows for varying
values of works to be determined. Through attribution a work can one day be worth a
substantial amount of money, but if that attribution is changed due to new information the
value of that work may plummet. Due to the fact that information about art and artist is
constantly being updated attribution and uncertainty are closely linked within the art
market. Along with changing information and opinions uncertainty in art is partially
created through the presence of forgeries. This could be seen as a reason why forgeries
should be hunted and eliminated. However, in reality this is not the case. Even without
the presence of forgeries the new information that is constantly being found about works
of art end up changing the attribution of the painting and thus changing the market value
of that work. With this in mind we can set up a theoretical market where forgeries do not


exist. In this market the structure would be the same as described earlier, prices would be
set through the demand of individual buyers and their tastes and preferences. As stated
above there would be a significant degree of uncertainty in that information about various
paintings is not necessarily accurate and can change when new facts are uncovered. As
new information is found the opinions of experts can be changed and the value of a work
will be diminished. This all occurs without the presence of forgeries. The new
information that gets discovered is as simple as a contract between an artist and a patron
that describes a work that may have previously been attributed to a different artist. In this
case there is no debate about authenticity there is simply new information that tells
historians that the original attribution was wrong and the painting was actually done by a
different artist. Even when forgeries are not involved in the market uncertainty still holds
a strong position and affects the value of a work.
Uncertainty in the art market is a big issue with its biggest contributor being the
presence of imperfect information. Only a small percentage of the worlds artworks have
a known creator and date with a hundred percent certainty. This issue will always create
debates among art historians and until some type of new technology is created to exactly
determine authorship those debates will never end. In this regard the presence of a
forgery does not really add any extra level of uncertainty. Therefore forgeries should not
be overly searched out and destroyed.
2.2 Transaction Costs
Transaction costs can take many forms in consideration of the art market. Some
of these costs include information costs (associated with finding information on the
artist), transportation costs (which include the actual cost of going to a gallery, finding a


work you like, and buying it), and authentication costs. As the focus here is the effect of
forgeries on the market the primary transaction cost that will be discussed will be the cost
of authentication. This is an additional cost that is brought to the market through the
presence of forgeries. There are several methods that have been developed to try and
attack the issue of forgery in art.
The most commonly used formula for the authentication of a work is as follows.
First the opinion of a connoisseur is needed. A connoisseur is an art historian that
specializes in identifying stylistic and historical qualities in art that can give a date and
artist to a specific work. Secondly, historical documentation is necessary to substantiate
the claim. Historical documentation may take the form of a certificate that was signed by
the artist as well as the patron, or a certificate specifying the dates in which the work was
bought and sold. This documentation is used as a means to clearly demonstrate that the
work in question can be traced to the artist it is claiming. The final step in authentication
is the scientific testing. Dating can be done on the panels, canvas, and paints present on a
specified work. Along similar lines x-rays can be taken of a work to determine if there
was an older work present on the canvas before the work in question was painted.
(Klarreich 2004) This three step process is the most common form of authentication,
however it still produces questions. Connoisseurs are merely offering their opinion on
the matter, it is a highly educated and researched opinion but still it is just an opinion.
Historical documents can easily be forged by a skilled forger and are often unreliable.
Scientific methods can only test for the date and region in which a work was created there
is no means for artist attribution through scientific tests. It is due to the limitations of this


type of authentication process that there are still a number of debates present as to
whether or not works are real or fake.
One method that is being developed to counter the inaccuracies of the current
system is one of statistical analysis. Currently researchers are working on a way to
digitally decompose works of art to identify an artists specific brush style. Through this
digital imagery currently they have been able to identify two artists works simply by
using this technique. This type of method is still in the developmental stages but it is
going in the right direction for an undeniable authentication. However, a statistical test
such as this does not come without some kind of costs. As of now the research team
requires high resolution scans of an image, four Linux workstations, and at least ten hours
of work. High resolution scans are not the easiest to come by and it will carry a
substantial monetary cost to perform this style of authentication.
At this time the best means of authenticating a work of art is through the three
step process presented above. Although this does not clearly define every questionable
work that comes up it does do a decent job of attributing works correctly. As the field
gets more advanced more modern technological approaches will be used, however in the
mean time the current system will need to be used. Through investigating the transaction
costs that are present at each stage of authentication coupled with the fact that
authentication may not be able to prove a work one way or another, it is clear that with
questionable works individuals dealing in the market should act in their own best interest
by buying and selling without investigation.
2.3 Benefits of a Forgery


Forgery, fake, and fraud all generally have a negative connotation associated with
them. However, in terms of the economic aspects of art a forgery can be a beneficial
device to promote economic growth. Through the presence of forgeries more people are
able to view a wider range of works and thus get utility through that viewing. Granted
for art historians or collectors there would be minimal utility in the viewing of a fake, but
the majority of people are not art historians. Therefore there is the potential for a much
greater amount of utility through the presence of forgeries than would otherwise be
Forgeries work also as a type of advertisement for a given artist. By having a
work forged, artists are able to get more widely known giving growth to their market.
More people are able to see works they have created even if it is a fake it is still a
representation of their original. Also high profile forgery cases gain media attention
putting out the name of the original artist and getting them more critical acclaim. Even
though the original artist will not get the monetary gain from a forgery of one of their
works, more people will have seen their work and be more likely to purchase an original.
Not only have forgeries been able to promote the very artist they are imitating but
also they have created their own type of cult market. There are several forgers that have
been caught and while one might think this would put an end to the presence of their
forgeries in actuality a new market develops for the forgeries themselves. Some
collectors will seek out forgeries done by master forgeries and pay top dollar for them.
(Lee 1988) In this way a new market gets created and more art is being exchanged.
Works of art are also legally reproduced every day in the form of prints that are
often sold in museums so consumers can purchase a copy of the works they have just


seen. These reproductions are not considered to be forgeries because they are generally
not bought with the intent to resell but instead with strictly an aesthetic and personal
utility. Though these are not by definition forgeries the same principles apply and one
can see how the distribution of these prints allow more people the opportunity to own an
otherwise unattainable relic.
3.0 Individual Choices
In order to really understand art and its functionality in the market one must
understand the purpose of art. This is a complicated idea due to the fact that there is no
clear cut definition of art. People can become educated in the field of art and still not
have a good grasp on what art truly is or what art means. Due to the fact that art is such
an indefinable idea that generates a huge array of products, determining the purpose
behind individual actions in a market for art becomes difficult. The one intrinsic truth of
art is that it allows for personal reflection in some manner. One can view art and be
moved by it or simply like what it depicts. In this sense the origins of art exist without
the existence of monetary value. As an artist you work with two objects, one of which is
to earn money the other however is to present your own ideas in a way that will be
pleasing to those that experience it. (Singer 1981) When art is broken down to this level
every member of the market can be looked at as to what their initial response to the
experience of an artistic work would be.
As the originators of works of art artists have a pivotal role in addressing purposes
behind the creation and distribution of art. Artists control the output and decide what the
public will see and experience as art. Though it may not be a known alliance among
artists they all act in a way that tends to create specific genres of art that have changed


and progressed over time. While they are in the process of creating a work of art their
initial instinct is to create something they take pleasure in. This pleasure comes from the
process as well as the final outcome. The pleasure obtained simply through the creation
and presentation of the work cannot be taken or altered in anyway. Based on this fact the
failure to sell a work will not depreciate the personal pleasure and utility already obtained
through the production process. Aesthetic utility remains in the work even if the
monetary valuation fails to reach its desired level.
Art history is the study of works of art in which a multitude of aspects are looked
at and used to determine quality and historical importance. Through the simple act of
investigation and appreciation art historians view art in its intrinsic cultural and visual
value. Never is the price of a work looked upon as a part of the valuation process. When
viewing and evaluating a work of art an art historian generally has no clue as to the worth
of that work. Monetary value has no relevance in art history and is not given any weight.
With this in mind for an artwork to be valuable it needs only to be appreciated for its
significance. This might lead one to claim that in these terms forgeries would adversely
affect art historical study. However, forgery allows for the further study of particular
artists and discovery of stylistic characteristics that may at one time been overlooked.
For an art historian new discovery is an excited and fulfilling moment even if it leads to
the reversal of authentication of works.
Dealers play a more interesting role. They exist in the market for the purpose of
transporting art among individuals with the intent to make a profit. The way they
function is generally through the ownership of a gallery. There they house and display
works they either receive directly from an artist to act as a salesmen or they act as


intermediaries and buy and sell numerous types of works. It is possible to make the
claim that based on this fact they are monetarily motivated and thus would be opposed to
forgeries and their potential devaluation of works. However, dealers are probably the
ones with the most to gain through the presence of a forgery. They can buy and sell any
work of art without the necessity of it being authentic. As long as a dealer is able to
turnover a work quick enough they will never lose any value when dealing in forgeries.
The forgery will be bought and the dealer will no longer have the responsibility of it. In
this type of situation the forgery helps the dealer turn more profit by allowing for more
works to be bought and sold. Clearly on the side of the dealer forgeries are a good thing
for the market.
Here we have seen how a number of players from all sides of the market will react
if forgeries are introduced. Based on these outcomes the assertion can be made that
transactions costs involved with trying to authenticate a work are far greater than the
effects the presence of the work will have on the individuals involved.
4.0 Conclusion
Too often forgeries are regarded as only negatively impacting art and the art
world. While there are some definite aspects of forgeries that do have a negative effect
the overall impact is beneficial to the market and its functionality. Many of the integral
members of this market can gain a substantial utility through the presence of forgeries.
By looking at the transaction costs, uncertainty, and benefits of forgeries it becomes clear
that from a market perspective forgeries allow the art market to grow and prosper.
Costs are high when dealing in woks of art. All the transaction costs that occur
during a purchase make it more difficult for works to move around freely. Buyers are


faced with problems of asymmetry that are difficult to overcome due the high level of
transaction costs that are present in the market. If forgeries are viewed as a detriment to
the art world and are heavily sought out transactions costs would soar to levels
comparable to the price of works themselves. Due to these huge costs it would be better
for the market if forgeries were allowed existence and dealt with on a what you dont
know wont hurt you basis. Where individuals accept works for what they are claimed
to be and do not ask questions until an issue arises like the one stated in the introduction.
Not only is it substantially costly to attack the presence of forgeries, but forgeries
allow for a degree of utility and benefit that would otherwise not exist. Through forgeries
more individuals are able to experience works of art that would otherwise be impossible.
Also forgeries can give attention to original works allowing or a heightened awareness of
art in general. This will in turn increase the amount of art that is getting bought and sold
aiding the market. Art historians can continually study artists and works of art through
the presence of forgeries because they allow for new developments in the art world.
These benefits of forgeries out weigh the potential costs of a forgery generating a market
more apt to deliver high levels of utility. Forgeries themselves do not cost the market
anything, only once they have been discovered do they cause for economic loss. Influx
of forgeries might drive prices down because of scarcity value however the way the art
market is set up is that it often relies on an individual buyer and if that buyer is unaware
of forgeries he will buy the work for the same price as if forgeries never existed.
Every aspect of the market can obtain a level of utility through the presence of
forgeries and not every aspect loses utility. Artists, art historians, and dealers all stand in
one way or another to benefit from the presence of a forgery. Due to the fact that key


members of the market obtain a degree of benefit from forgeries and authenticating only
creates loss it makes sense to forego the authentication process and accept a work for
what it is.
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Ashenfelter, O. How Auctions Work for Wine and Art, Journal of Economic
Perspectives Summer 1989
Athineos, D. This Madonna Should Blush, Forbes Mar. 1997
Barrett, J. Crimes Involving Art, The Journal of Criminal Law and Criminology
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